Quick Hit:

House Republicans have introduced a sweeping tax and spending bill that would dramatically increase the tax on major university endowments from 1.4% to 21%, matching the corporate tax rate. 

Key Details:

• The tax targets private universities with endowments exceeding $2 million per student.

• It’s projected to generate $70 billion in revenue over 10 years, offsetting Trump-era tax cuts.

• The bill is part of a broader reconciliation package that could bypass the Senate filibuster.

Diving Deeper:

The House Ways and Means Committee unveiled text for its latest reconciliation bill Monday, revealing a bold Republican effort to rein in the tax-exempt status of elite universities while financing key elements of President Donald Trump’s permanent tax reform plan. Central to the proposal is a massive hike in the excise tax on university endowments, from the 1.4% level set in the 2017 Tax Cuts and Jobs Act to a steep 21%, aligning it with the corporate tax rate.

This increase would only apply to private institutions with endowment assets exceeding $2 million per student. Notably, religious and state-run universities would be exempt, targeting the measure squarely at the most well-funded and ideologically left-leaning institutions in the country. It’s a pointed shot at higher education establishments that Republicans argue have morphed into incubators for radical leftism.

Rep. Troy Nehls (R-TX), who had previously introduced a stand-alone bill with the same endowment tax hike, applauded the provision’s inclusion. “I love it. We should do it,” Nehls told the Washington Examiner in March. His measure is expected to raise about $70 billion over a decade, earmarked to support the permanence of the Trump tax cuts and other GOP tax relief goals.

The bill also includes a tiered excise tax increase on private foundations with over $5 billion in assets, with some foundations facing up to a 10% rate. These tax hikes are part of a broader revenue-raising approach Republicans are using to justify a larger suite of tax reductions.

Beyond tax policy, the Trump administration has signaled it is willing to punish universities financially for political and cultural stances it views as hostile or discriminatory. That includes withholding $400 million from Columbia University over accusations of enabling antisemitism and pausing $175 million to the University of Pennsylvania due to its transgender policies. Johns Hopkins also saw $800 million in U.S. aid halted.